Closed Rentals #10 and #11 today

20 Replies

#10 is a super clean move-in ready 3/1/1 in my favorite neighborhood in south kansas city.  2nd house using my portfolio lender Arvest.  Purchase was 62k with market rent around $900.  No work required on this one.

#11 is a house I previously had negotiated on and walked away from.  It sat on market for a month and went back and picked up in for $500 less than my previous max offer.  This one cost $55,000 in good condition, does need some tree work and a roof.  In order to swing the deal quickly this was an all cash deal and Arvest is starting a file today for a cash-out mortgage on it, which I will turn into three downpayments on additional rental properties. The house is a largish 3/1 with an add-on den with fireplace.  Decent blue collar area in south grandview.  I had previously bought a house on the same street and got a high volume of calls/interest on it.  I rented that other house at 800 but I'm sure this one will rent at least 875.  It's larger, still has functional garage, and I really was getting a large number of calls and showings on the other house - I ended up turning down three deposits.

Other Updates:

Had three move-ins for May 1st on new leases.  #8 house renovation in progress, the fence across the back was completed.  Installed the new roof on #7 house and signed a new lease with the tenant I inherited from previous owner - who did not have a valid lease in effect for over 24 months.  Had to pay $925 for an enormous dying elm tree removal on house #3 (Wally) and that was after I saved 575 by shopping around and going with a craigslist guy.  Spent 3 grand on two fences at #6 and #8 but they backyard view is incredibly better now for both.  Also had a microwave die at house #1 (Bella).

Inventory: I have two new-to-me vacant houses to fill and one rehab in progress.  All other units rented out and now occupied.  Hope to close about four more in May/June then take a few months off from acquisition and let things settle in for a while as I will have completed deployment of my primary residence home equity loan and the proceeds from a fancy car I used to have into rental properties.  So future acquisition will be a bit slower than the past five months have been, as one of my goals for this was to pretty much leave savings alone. After the next four I'll get into a pattern using cash flow to pay down mortgages one at a time, refinance out, and redeploy.  Plus the day job is really getting crazy with some initiatives the company has going on.  

Congrats man.  You have officially crossed the 10 property barrier and with ease it seems.  Keep up the good work.  I hope to be you in a few years. 

Hey @Cliff Harrison

 how has working with Arvest been and what kind of terms are you getting? We tried to work with them a little over a year ago but we couldn't make anything happen together.

That is so awesome, congrats 

I hope to get to your level in the next few years. 

Keep up the good work!!

It's always great to hear about success stories from other parts of the US.  It seems like there are lots of good deals where you are at to generate decent cash flow!

Congrats buddy. Seems like the other houses are banking you money right?

AWESOME!!! Thanks for the motivation.

@Phillip Syrios

Hi Phillip - my first loan with Arv was a conventional 30year (my 10th and last) and got competitive terms. This one was portfolio loan and it is a 5 year ARM on 30 year amortization, rate is about 5.25% with about $600 origination fee. It's not the sweet deal I got on my first four loans with my credit union but there is no balloon, which is what my other option consisted of. On the cash-out loan, they are going to be doing 75% LTV.

Who are you going with instead?

Thanks

Cliff

Congrats Cliff, that's very impressive work!

Originally posted by @Cliff Harrison :

@Phillip Syrios

Hi Phillip - my first loan with Arv was a conventional 30year (my 10th and last) and got competitive terms. This one was portfolio loan and it is a 5 year ARM on 30 year amortization, rate is about 5.25% with about $600 origination fee. It's not the sweet deal I got on my first four loans with my credit union but there is no balloon, which is what my other option consisted of. On the cash-out loan, they are going to be doing 75% LTV.

Who are you going with instead?

Thanks

Cliff

 Those sound like pretty good terms, the 30 year amortization is nice. Did they loan on appraised value or on cost into the property? We have really enjoyed working with Great American Bank. They have served us well and always been easy to work with. They have the same terms as just about everyone else but after we have owned the property for awhile they loan on appraised value which is great for us since they normally appraise for more than we have into the property.

Nice job @Cliff Harrison !

I have a similar strategy but am about 6 to 9 months behind you. I'm closing on my second this Friday.

I think elsewhere I read that when you started you had a desire to invest in Johnson County but then moved to south KCMO since the deals seem much better. Cashflow definitely seems very strong in Missouri, but what are your thoughts on the potential for appreciation?

I'm running into the same challenges you probably did in Johnson County finding good deals so am going to start researching Missouri.

Way to go! You are rocking it!  

Congrats Cliff.keep up the good work

Originally posted by @Mitch Rice :

Nice job @Cliff Harrison!

I have a similar strategy but am about 6 to 9 months behind you. I'm closing on my second this Friday.

I think elsewhere I read that when you started you had a desire to invest in Johnson County but then moved to south KCMO since the deals seem much better. Cashflow definitely seems very strong in Missouri, but what are your thoughts on the potential for appreciation?

I'm running into the same challenges you probably did in Johnson County finding good deals so am going to start researching Missouri.

Hi Mitch - That is exactly right. I'm mostly doing this for the income stream, not appreciation. So there may not be much, although I think in some areas it will be ok as more people need affordable housing. It is NOT going to be a 'high appreciation' type of environment. But I don't expect to lose principal. I look at it like buying bonds. Keep expenses down (low vacancy, quality tenants) and costs down and earn 2-3 hundred per month. Having a vacant house one month doesn't hurt too much when it's only $300 month PITI. Get a large number of them working for me and as they get paid off, may be sell them off slowly when I get into my own retirement. Note - I don't think the more affordable areas in JoCo (downtown Olathe, and north of 435 areas, are going to see amazing appreciation either). Different, legit ways of doing it but bottom line I'd rather have 10 houses than 4 houses.

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